Finding Your Purpose: A Key Part of Retirement Planning
How are your retirement plans coming along? Maybe you’ve already put some money away for your golden years. Maybe you’ve read a book or two about saving for retirement, or you’re working with a financial advisor to invest your hard-earned money in an RRSP. (If you haven’t done any of the above, it’s never too early to get started.)
Not surprisingly, saving up a retirement nest egg becomes a bigger priority the closer we get to retirement age – which, in Canada, is 64.5 years, on average. After all, no one wants to lower their standard of living or, worse, outlive their money. Careful financial planning and diligent saving will help ensure that essentials like food and housing are covered. However, there’s more to retirement than dollars and cents. The big question that personal finance books, blogs and advisors frequently leave out is this: What are you going to do after you stop working?
That’s what Mike Drak wants you to think about. Drak is a blogger, speaker and author of two books: Victory Lap Retirement and the recently released Retirement Heaven or Hell: Which Will You Choose?, He’s passionate about helping Canadians transition into a fulfilling retirement, in part because of his own experience: after 38 years of working in the financial services industry, Drak was “packaged out” by his employer. The abrupt end of his working life left him feeling lost – a situation he calls “retirement shock.” We invited Drak to share his thoughts on retirement planning with purpose, and how to successfully transition to life after work.
Q: You’ve written two books on planning for life after retirement. Why is it important to figure out how we’ll spend our time?
A: Some retirees have a hard time when they stop working. When they left their job, they left behind their identity and purpose, their work friends, their reason for getting out of bed in the morning. They’ve lost so much, and until they find a way to replace the feelings of achievement, success and recognition – which they still need – they won’t be happy. For some people, that takes a long time. It’s very, very tough. I suffered from retirement shock. The effects can be very bad unless you’re prepared.
Q: In your new book, you describe the three stages of retirement: the Honeymoon Stage, Retirement Hell and Escaping from Retirement Hell. Can you tell us about each one?
A: When you retire, you think life’s going to be perfect, and for a while, it is. That’s the Honeymoon Stage – you’re relaxing, the pressure’s off and you can do all the things you didn’t have time for before. But once you do them, the list is empty, and you have to find something new to fill those 2,000 hours a year you used to spend at work. If you don’t have a plan and establish a good structure, you’ll be bored, and you’ll start drifting. Over time, it can really mess you up, mentally – that’s Retirement Hell. You’ve got to have a plan. How can you spend your time in a productive and healthy way and build a new identity? That’s Escaping from Retirement Hell. Maybe you’ll start a new small business, or volunteer three days a week. Maybe you’ll find communities to be part of, to create friendships and relationships. Those are all important things to focus on.
Q: You’re a “retirement lifestyle designer” who helps people make the transition to a fulfilling retirement. What does that involve?
A: I sit down with people who are three to five years from retirement. They often don’t know what they want to do. They plan to spend more time with the grandkids, but that’s not going to fill up your life. So, we try to put structure back in. What would they like to do in a week? What challenges would they like to incorporate? What adventures do they want to go on? Will they need to generate active income? We put a lot of thought into it, so when they do retire, they know what they’re retiring to – this lifestyle they’ve created – and they have something to look forward to, not just sitting around thinking “What will I do next?”
It’s actually similar to what we’ve experienced during the pandemic. So many people, when the pandemic hit, they didn’t have to go into work. They enjoyed it for the first week or so, like, “I can watch movies all day.” But then they had nothing else to fill their time. Their days were the same over and over again. So many people lost a sense of purpose, and they had a hard time until they figured out a routine to get them through the day. The same thing happens in retirement. People think, “I’m supposed to be happy. Why do I feel so bad?” It’s because they’re just drifting. I don’t want people to waste a couple of years figuring it out. That’s why you need to prepare.
Q: How does our sense of purpose change over time?
A: When you work full-time, your purpose is maybe paying down the mortgage, providing food for your kids, raising them and saving for their education and whatnot. Going to work financed all these things. But when the kids leave the nest and the mortgage is paid off, you have to find a new purpose.
Everybody has different needs. Traditional full-stop retirement is an artificial finish line, and it doesn’t work anymore because of increasing longevity. Work is less physical than it was in the past, so people aren’t as worn out when they retire. They need something to be active at, and they need something to challenge their mind or they’ll lose sharpness over time. Working gives you those benefits, but people never think of it that way – all those pluses in addition to the money. So that’s why I’m a big supporter of part-time or volunteer work in retirement. You need something that will challenge you and force you to learn new things.
Q: Do you have any thoughts on retirement and the COVID-19 pandemic?
A: We learned things from the pandemic. We learned the risk of being isolated. If you were prevented from meeting with friends and family, you could see how that drained you mentally. We’re social animals. We’ve got to make sure we’re interacting with other people and spending quality time with friends and family, and that we have a lot of friends.
The second thing we learned is that people with underlying conditions – young and old – are at higher risk of suffering from COVID-19 if they catch it. Many of those conditions, such as obesity and high blood pressure, are reversible through lifestyle changes. You may be vulnerable now, but you can change that. If you work at it and adopt healthy lifestyle habits, you can increase your life span and lower the odds of becoming disabled earlier in life.
We also learned the importance of belonging to tribes or groups to meet your social needs. It gets you involved in some type of activity, forces you to learn new things and gets you out of your comfort zone. These things are important for a happy retirement, too. We need to do these things to increase our longevity and maintain our health for as long as possible, but first we have to recognize it and realize what’s important.
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